TEL AVIV, Jan 28 (Reuters) - Palestinian President Mahmoud Abbas proposed on Tuesday that Israel carry out a gradual three-year withdrawal from the occupied West Bank as part of any future peace deal, an offer that fell short of Israeli demands.

He gave the timeframe in an interview shown at an international security conference in Tel Aviv, where Israeli Defence Minister Moshe Yaalon challenged the effectiveness of the Palestinian leader's current security commitments.

"I am saying that clearly: whoever proposes 10 or 15 years for a transition period does not want to withdraw," Abbas said. "We say that a transitional period not exceed three years, during which Israel can withdraw gradually."

Abbas has spoken in general terms in past meetings with journalists of a phased pullout from the West Bank after a final land-for-peace accord, similar to Israel's three-year withdrawal from Sinai after it signed a peace treaty with Egypt in 1979.

Israel's demand for a continuing military presence in the Jordan Valley, the likely eastern border of a Palestinian state in the West Bank and Gaza Strip, has been a major issue of contention in U.S.-brokered peace talks that began in July and have since stalled with the two sides still far apart.

Israeli officials have called such a deployment vital to their country's security, voicing concern the West Bank could become a staging ground for Palestinian militant attacks if Israeli troops pulled out completely. Some officials have advocated a 40-year Israeli military presence.

Appearing to address such fears, Abbas said the Palestinians were willing for a third party such as NATO, the U.S.-led alliance, to "take Israel's place after the withdrawal ... to assure both sides that things will continue as normal".

Foreign powers have been helping to build up Abbas's security services in the West Bank and ward off any challenge from breakaway Hamas Islamists who control the Gaza Strip.

CRITICISM

Israeli Prime Minister Benjamin Netanyahu accused Abbas of failing to make concessions for peace, citing his unwillingness to recognise Israel as a Jewish state and to accept that it would not be "deluged" by Palestinian refugees in the future.

In a speech to the same conference, hosted by Tel Aviv University's INSS think-tank, Netanyahu reiterated earlier calls for the Palestinians to have demilitarised statehood only and a need for firm security arrangements under any peace deal.

Yaalon poured scorn on the commitment of the Palestinian Authority, which exercises limited self-rule in the West Bank under interim peace deals, to follow through in moves against Palestinian militants.

"We counted 1,040 cases that were handled by the Palestinian security services in 2013. How many of them went to trial? Zero," Yaalon told the forum.

In the same period, Yaalon said, Israel had arrested some 3,000 Palestinians, many of whom were later imprisoned.

Yaalon, who balks at the idea of removing any Jewish settlements from the West Bank ratcheted up acrimony this month with an Israeli newspaper quoting him as dismissing U.S. Secretary of State John Kerry, the peace patron, as "messianic".

Asked what his administration was doing to maintain West Bank calm, Abbas said: "All the security forces are devoted to performing their duty to prevent arms smuggling and their use within the Palestinian Authority or Israel."

A U.S. official briefed on the West Bank situation was hard put to explain the disagreement between Abbas and Yaalon.

"It's true that we haven't seen trials" of Palestinian suspects held by Abbas's administration, the official told Reuters on condition of anonymity. But, the official said, that did not mean there was no Palestinian security enforcement.

Asked if that meant Abbas's forces might be dealing with suspects away from public view, the U.S. official said "yes".

Two surveys released on Tuesday, by the INSS and the Palestinian Center for Policy and Survey Research (PSR), found that 67 percent of Israelis and 70 percent of Palestinians do not believe a permanent peace accord can be reached.

The INSS poll surveyed 1,200 Israeli Jews, while 1,270 Palestinians were interviewed by the PSR in the West Bank and Gaza Strip. Both polls have a margin of error of 3 percent. (Writing by Jeffrey Heller and Dan Williams, editing by Gareth Jones)

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